E-Publisher Wins a Big Round

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E-Publisher Wins a Big Round

NEW YORK – With electronic rights to countless books potentially at stake, a small e-publisher has won a second legal round against Random House.

A three-judge panel of the U.S. Court of Appeals for the Second Circuit unanimously upheld an earlier decision rejecting Random House's request for a preliminary injunction against RosettaBooks, which is selling e-versions of Cat's Cradle and seven other old Random House books.

"It is a good day for authors and for the development of electronic reading," Arthur Klebanoff, RosettaBooks' chief executive, said Monday.

Random House spokesman Stuart Applebaum said the ruling "was on procedural grounds, not on the ultimate legal merits of our arguments," and that the copyright infringement lawsuit would continue.

"We are encouraged by the Second Circuit's view that there are serious factual questions to be explored ... and we look forward to pursuing that at the District Court level," Applebaum said Monday.

Random House, the world's largest English-language trade publisher, sued a year ago. Among the books cited were such acclaimed novels as Kurt Vonnegut's Cat's Cradle and Slaughterhouse-Five, as well as William Styron's Sophie's Choice and The Confessions of Nat Turner.

Some were first published as far back as the early 1960s, long before the rise of the Internet. RosettaBooks reached contractual agreements with the authors or authors' representatives, but Random House argues that electronic rights are implicit because e-books are simply another version of the paper book.

The Random House suit notes that the contract for The Confessions of Nat Turner gives the publisher exclusive rights to publish in English "in such style, and manner as Random House deems suitable."

Should RosettaBooks ultimately prevail, the online rights to any number of old titles could become available.

Last July, a federal judge rejected Random House's request for a preliminary injunction. U.S. District Judge Sidney H. Stein ruled that the publisher was "not likely to succeed on the merits of its copyright infringement claim and cannot demonstrate irreparable harm."

On Friday, the appeals court reaffirmed that decision. While acknowledging "there is some appeal" to Random House's definition of e-books, the court concluded that New York state law has "arguably adopted a restrictive view" when "contracting parties do not expressly provide coverage of such future forms."

The court also noted that "while Random House expresses fear about harm to its goodwill," an injunction could put RosettaBooks out of business.

Although demand for e-books remains small, and Random House recently shut down its electronic imprint, sales have been growing and the market likely will become increasingly important.

Klebanoff said sales of the eight disputed titles total about 2,000 copies.

The book world has been strongly divided over the lawsuit. Simon & Schuster and Penguin Putnam were among those backing Random House, while the Authors Guild and the Association of Authors' Representatives supported RosettaBooks.

RosettaBooks has continued to acquire old titles. Last fall, it agreed with the estate of Virginia Woolf to issue such classic titles as To the Lighthouse and A Room of One's Own. It will also release electronic versions of E.M. Forster's A Passage to India and Aspects of the Novel.